Here Comes HSBC China PMI...

Economists polled by Bloomberg are looking for PMI to slide to 47.7, from 48.2.

Minutes earlier we got China's official PMI, which beat expectations, rising to 50.3 in July, from 50.1 the previous month. Economists were expecting manufacturing to contract.

HSBC Flash PMI which reflects the responses of 85 - 90% of those surveyed, fell to an 11-month low of 47.7. This spooked markets and showed the Chinese economic slowdown is deepening.

Societe Generale analysts point out that the weakness in the Flash PMI was "broadly based, with four out of five major sub-indices deteriorating again." The employment sub-index in the Flash PMI report came in at 47.3 is at its lowest since early 2009.

With China's excess capacity problems, we will also be watching the inventory of finished goods sub-index.